Sunday, March 31, 2019

We review Tales of Two Cities: The Best and Worst of Times in Today’s New York, edited by John Freeman and illustrated by Molly Crabapple.

The ‘Two Cities’ in the title of this book (published by OR books in association with Housing Works) are both New York. John Freeman in his introduction tells us that he set out to collect stories about life in New York that focus on the human consequences of inequality of wealth, which ‘is at its most acute in the ‘world cities’ where the rich choose to live (or invest their fortunes in real estate).’ What does it ‘feel like’ to live side by side with people who are vastly richer and/or vastly poorer than you are?

Some of the thirty stories are true accounts of experiences in the authors’ own lives. Others are fictional, but these too are meant to be true to life. About half of the authors dwell on matters that have no direct bearing on the theme of economic inequality. This is not a complaint: their stories are also of interest. But here we reflect on a few of the pieces that do focus on the ostensible theme of the collection.

An epidemic of child suicides

Maria Venegas describes her experience teaching in an after-school programme for children in an inner city area. The kids find it hard to cope with the demands made on them and often break down in tears. One of them says she wishes she could kill herself. Indeed, ten NYC school students did exactly that in just seven weeks in 2014 – an ‘epidemic’ by comparison with the previous NYC norm of ten child suicides a year.

’What is pushing these kids over the edge?’ – asks the teacher. The immediate ‘push’ is clearly their anxiety about getting the high marks expected of them in tests that are often confusing and badly designed. But let’s look deeper. She gives us a clue when she mentions that a 10-year old girl in her class has an ‘H written across the front of her sweatshirt’ – H for Harvard. After a few pages we learn that the hallways at the charter school attended by this girl are named after Ivy League universities: Harvard, Yale, Princeton, etc. ‘The Ivy Leagues dangle before her every day.’

Nowadays every American youngster is constantly bombarded from all directions with the message: You can make it if you try hard enough. This ‘encouragement’ is regarded as a big advance on the bad old days when low-caste children were taught humbly to accept their place at the bottom of the pile. But the new message is actually even crueller than the old one, because it carries the clear though unspoken implication that if you don’t make it that will mean you didn’t try hard enough. You will have only yourself to blame.

As those who perform this charade of ‘equal opportunity’ must know very well, only a few of the children before whom they ‘dangle’ the highly exclusive, elitist and expensive Ivy Leagues will ever get there – and even fewer will make it through to graduation. The teacher herself, although she probably comes from a background somewhat less disadvantaged than that of her students, went to the University of Illinois, one of the more accessible and considerably cheaper state colleges. The ‘dangling’ is the psychic equivalent of hurling these kids into a brick wall – again and again and again. The remarkable thing is not that some of them commit suicide but that most of them do not.

Such are the fruits of efforts at reform – undertaken in many cases with the best of intentions – that leaves intact the capitalist structure of our society.

The housing treadmill

Several of the stories are about housing – ‘a perpetual concern,’ as Freeman notes. An increasing number of city residents cannot afford to rent a home, let alone buy one. Freeman cites some astonishing statistics: nearly a third of New Yorkers pay over half of their annual income in rent, while in the Bronx, which is the poorest of New York’s boroughs, rent swallows two thirds of the income of the typical household. Besides the problem of high rents, there is also the endless struggle to get basic services and force landlords to make essential repairs.

And yet New York has a long history of legislative reform aimed at controlling rents and protecting tenants against eviction and mistreatment. A recurring theme is the minimal impact of these reforms in practice. Landlords have many ways of evading legal restrictions, some of them quite ingenious. Of particular interest in this respect is the contribution by D.W. Gibson, a lawyer who specializes in the thankless, frustrating, and poorly remunerated task of protecting tenants’ rights (most lawyers prefer to practice law in more lucrative fields). He describes how landlords who want to evict tenants but lack adequate legal grounds for doing so induce them to leave by making life unbearable, one method being to remove kitchen and bathroom installations under the pretext of renovation.

One place where those who couldn’t afford the rents used to go – in the 1990s, before the authorities decided to seal them off – was the tunnels beneath the city. There are several hundred miles of tunnels and a couple of thousand people lived down there together with the rats. In a memoir evocatively entitled ‘Near the Edge of Darkness’ Colum McCann recounts his explorations of this underworld.

Tables turned

Jonathan Dee’s story stands alone in being written from the perspective of the rich. The narrator and his wife get caught in a snowstorm as they drive home to their townhouse from a charity dinner. They encounter a poor man with a shovel who offers to dig them out – for $100, a charge that he soon raises to $200. The narrator considers this unreasonable and swears at the man, but ends up buying the shovel off him for $937 – all the cash that he has in his wallet. The man responds to his rant by explaining: ‘It’s called the marketplace, bitch. It’s called knowing what your customer will bear.’

The rich guy is used to having his way, and under normal circumstances he has the resources to get almost anything he wants. Under the exceptional circumstances of the snowstorm, however, he and his wife find themselves isolated inside a ‘bubble’ where the only other person is the poor man, and it is he who happens to own the only ‘means of production’ that matters in that particular situation – namely, the shovel. The tables are turned: for once the narrator experiences the vulnerability of those who do not own the means of production to the blackmail of those who do.

Caught in the toils of the engine

One of the best stories is Bill Cheng’s ‘Engine.’ The author describes the loneliness, emptiness, self-loathing, and self-pity that he felt as a young man struggling to make a living as he drifted from one dead-end job to another. His philosophical reflections are succinct and to the point. For instance: ‘I don’t know how to talk about money. It’s one of those things we can’t seem to get shook of. As much as we pretend it doesn’t matter, it sets the stage for all our relationships.’

Alone among the contributors, Cheng has a clear concept of the functioning of the capitalist system inside which we all live. He uses the potent image of ‘the Engine’:

‘Even now there are still times when I can almost glimpse the Engine in its entirety: its high walls, the gears and cogs and avenues through which wealth and power traffic.’

We are all caught in the toils of the Engine.

In this respect he contrasts favourably with the book’s editor John Freeman, who has no concept of the system as such. He is more interested in the secondary issue of why some people ‘succeed’ and others ‘fail’ and does not perceive the mechanism that generates, deals out, and assigns meaning to these human fates. But we can willingly agree with his conclusion that chance (‘luck’) plays a major role in deciding this secondary issue.

A final observation. The units in the competitive struggle are no longer families, as they were in traditional class societies, but lone individuals. This is exemplified by the story that Freeman himself tells about his relationship with his younger brother. An inheritance has enabled Freeman to buy an apartment in Manhattan, while his brother lives in a homeless shelter. He tries to help his brother, whom he loves and to whom he dedicates the book, but it apparently never occurs to him that he could simply provide him with steady financial support. No doubt his brother’s ‘pride’ would prevent him from accepting such an arrangement.

The Halo Halo! Column from the December 2014 issue of the Socialist Standard

A word of advice to those who are in the habit of talking to God; don’t bother. You can’t believe a word he says and half the time he hasn’t a clue what he’s talking about.

Back in July he informed a group of 100 Liberian bishops, pastors, prophets and other assorted God-botherers that the Ebola outbreak was sent because of their corruption and immorality. Well, presumably, because of the corruption and immorality of the people generally. Not of the bishops, pastors and prophets, obviously.

He then had them running around like headless chickens demanding that the country be ‘locked up for three days of silence, fasting and prayer’ because he was ‘angry with Liberia’ and that ‘Liberians have to pray and seek God’s forgiveness over the corruption and immoral acts such as homosexualism’ (sic) and that ‘As Christians we must repent and seek God’s forgiveness’ (Liberian Daily Observer 31 July 2014).

Yet here we are several months later, and after much devout ‘fasting and prayer’ in Liberia and other affected areas, the Ebola outbreak continues.

Here too, back in February when much of the country was being flooded out God informed UKIP’s David Silvester (now ex-UKIP since his expulsion) that the floods had been sent in revenge for the newly-passed legislation allowing gays to get married. ‘This is not new, this happened in the Old Testament – they were warned if they turned against God there would be pestilence, there would be war, there would be disasters’ Silvester told us.

God must be reasonably happy with our corruption and immorality though. Even without the silence, fasting and prayers he eventually changed his mind and called off the flooding.

OK, he’s probably only having a joke and winding us up, but these occasional messages from God do become a bit irritating after a while. And now he’s at it again. Not threats this time, no, this time he’s decided to help the Pope get his head around the ideas of evolution and the Big Bang.

Unfortunately God doesn’t seem to have a very good grasp of these issues himself, or maybe the Pope wasn’t paying attention, but according to his latest thinking on the laws of physics (given via the Pope) ‘The Big Bang does not contradict the divine act of creation’. And even more puzzling, ‘Evolution of nature is not inconsistent with the notion of creation’ (Guardian 29 October).

Bearing in mind that without any assistance from God we now know that evolution takes place very gradually, over millions of years, God’s latest views on the subject are not much better than his previous message in Genesis; that the act of creation took just six days, and with both the animals and mankind being created on the final, sixth day. And although he omitted to give us the exact date for it, one of his previous spokesmen, the 17th century Bishop James Ussher, did. Creation took place, apparently, on 23rd October 4004 BC. Not to be outdone, another religious scholar, one Dr John Lightfoot, calculated that it occurred at 9 o’clock in the morning.

Modern science, meanwhile, tells us that the Big Bang occurred about 13.8 billion years ago. So in spite of God’s and the Pope’s efforts to take us back to the middle ages, and to square bronze-age mythology with reality, there is still a slight discrepancy between science and religion.

What we need, perhaps, is a new version of the bible to clarify God’s latest views. – ‘In the beginning was the word, and the word was BOOM!’ But until we get that who should we believe?

The Greasy Pole column from the December 2014 issue of the Socialist Standard

To get on in what they see as their exclusive world a politician should popularise a word or phrase by which they can be readily identified and remembered – even if it turns out to work against them. Like Tony Blair and ‘education, education, education…’ Or David Cameron and ‘We are all in this together’… And Theresa May, when she was in opposition and usually relying on her flowery shoes to promote herself, telling the Tory conference that they had earned themselves the title of ‘The Nasty Party’ (although recently her Minister of State Lib Dem Norman Baker resigned because he had found that working for her was ‘like walking through mud’ – which may turn out to be his exclusive phrase). And with that same preoccupation with mud there has been the persistently striving Defence Secretary Michael Fallon uttering a warning about the British people being ‘swamped’ by an influx of immigrants which makes them feel that they are ‘. . . under siege with large numbers of migrant workers and people claiming benefits’.

Blunkett

These comments, just when Nigel Farage is grinning so boozily and hopefully on the side-lines, did not appeal to David Cameron. Naturally he had to step up to defend Fallon, if only because he had so recently promoted him: ‘It is right for politicians to raise concerns about immigration but we should always choose our language carefully’ he advised the Commons. Less heartening for Fallon would have been the support from one of Labour’s most spectacular ministerial failures: ‘I believe both Michael Fallon and I were right to speak out on the issue’ offered ex-Home Secretary David Blunkett in the Daily Mail, also suggesting that all UK citizens should be expected to be able to speak English and restricted to benefits based on what they have ‘contributed’ to the country. Whatever changes Blunkett has been through since he was relieved of the stress of ministerial life have not included any development of insight or socially therapeutic thinking.

Rottweiler

In spite of the risks that another speech from him may have stimulated more responses like Blunkett’s, Fallon did his best to apologise, confessing to Radio Five listeners that ‘I misspoke yesterday, I used words I wouldn’t normally have used’. He did not expand on his use of ‘normally’, which might have raised the matter of his reputation, which helped so much towards his promotion as ‘The Thinking Man’s Rottweiler’. And he made no comment on his use of the word ‘swamp’ with its connotations of a cruelly prolonged, widely destructive and epidemical disaster. Was it related to his background as an ardent ‘No Turning Back’ devotee of the Iron Lady (who herself in1978 gave voice to her thoughts about ‘…people are really rather afraid that this country might be rather swamped by people with a different culture’)? Years later, as Thatcher was being ousted from Number Ten, Fallon called on her to try to convince her that ‘all was not lost’. At first he was turned away, told that she was too busy but when she knew he had called she had him brought back to make his obeisances. On the anniversary of that day, which is stubbornly celebrated by some of the areas laid waste by the harsher poverty under Thatcher governments, Fallon demonstrates his unchanging devotion to her memory by wearing a black tie.

Defence

Fallon was first elected in 1983, he lost that seat in 1992 but came back, for Sevenoaks in Kent, in 1997. He was soon embarked on a ministerial career, probably in recognition of his talents as a ‘fire-fighter’ to douse any smouldering rebels on the Tory benches. His big chance has been his promotion to his present job as Minister of Defence, after only two years in Business and Enterprise. In his time he has held a series of directorships one of which was in brokers Tullett Prebon, a major donor to the Tory Party and involved in the FSA investigation into what in the City is bashfully called malpractice such as the notorious LIBOR interest fixing operation. Another interest of Fallon has been Quality Care Homes whose comforting title overlays its reputation for paying its workers less than the proposed minimum wage and its low assessment on some matters by the Care Quality Commission.

Slag

For a couple of years leading up to Thatcher’s resignation Fallon was a Tory Whip, so that experienced Members had to learn how to handle him while aware that, as one of them put it, ‘…If he said that everything is going swimmingly’ he was actually saying ‘It’s a fucking disaster’. One example of what was on that Honourable Member’s mind was an incident soon after the Tory victory in 2010, when Cameron was strutting his stuff as the leader of a ‘female friendly’ government. It involved one Bryony Gordon, a journalist who had worked for the Daily Telegraph and whose material and style was represented by the title of one of her major autobiographical works The Wrong Knickers; A Decade Of Chaos. She was at a leaving party in a ‘grotty bar’ in Westminster when Fallon, who had been drinking at another party, arrived and told her that she was a ‘slag’. The uproar, inflamed by Gordon, was not appeased by Fallon’s minders assuring everyone that he had used the word ‘slattern’ – a distinction too fine to be of any help to the floundering minister. In another incident a couple of years later Fallon arrived at a Christmas party thrown by a wealthy Tory MP. He was an uninvited guest and had already been drinking. He quickly clamped himself to a young woman noticeable in a dramatic party dress. Again it was necessary for him to be extracted by a minder, anxious because the woman was employed by the Russian energy industry while Fallon was the Minister of State for Energy.

As they approach their final general election the Cameron government will intensify their campaign to re-write history by convincing us that they are in progress to cure the blundering chaos of the Labour government. This, they will argue, is due to their insightful policies and sublime personalities. Included in this will be Michael Fallon, now revealing himself in a ministry where his earliest predecessor Liam Fox slipped from a strong contender as a future leader into obscurity. The politics of capitalism will always be scattered with miserable, exposed failures.

Capitalism is riddled with fear. Fear of its ever present wars. Fear of crime and criminals. Fear of being alone. Fear of being consumed by personal debt. The divisive fear of immigrants. And the fear common to all who are compelled to work for wages – the fear of unemployment.

Fear and hate are frequent bedfellows and Josef Goebbels, the master of Nazi state propaganda, knew exactly where to exploit those emotions when he affirmed: ‘Think of the press as a great keyboard on which the government can play’. Where state benefits are concerned the media has peddled hate to the fearful – pounding the keyboard with glee. Cutting back on benefits when capitalism is in crisis is nothing new. During capitalism’s last depression those workers who had paid into the scheme received the dole for 15 weeks. The National Government, another coalition, cut the benefits of those on the scheme who were unemployed by 10 percent leaving them to rot alongside the other millions relying on poor law relief. In August of 1931 means testing the unemployed was implemented. Underpinning the poor laws and its sibling, the dole, are the deeply entrenched ruling class ideas of making claiming benefits so, ‘unpleasant that, people would not claim it, stigmatising relief so that it became an object of wholesome horror’ (wikipedia.org). Governments, whether claiming to be left, right or centre have been cutting benefits since the post-war boom of the 1970’s ended. And the reason why? Because they are a charge on profits, and thus detrimental to the real orchestrators of the tune and the owners of the keyboard – the capitalist class.

Handouts and handouts

The words benefits and scrounger have become conjoined. Goebbels would have been proud of the media hacks who have slavishly followed his guidelines: ‘The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly – it must confine itself to a few points and repeat them over and over’. Thus the fearful have been given their slogan and its corollary is revealed in, ‘a YouGov survey which shows: Up to 212,000 have been physically attacked because they’re on benefits’ (mirror.co.uk, 8 September).

Benefits, dole, and handouts are what is made available to the unemployed, and those surviving on low wages. Subsidies, funding and support are invested by the state in corporations. A report written for the TUC entitled ‘The Great Train Robbery’ showed, amongst other things, that the, ‘train operating companies are entirely reliant upon public subsidies to run services. The top five recipients alone received almost £3bn in taxpayer support between 2007 and 2011. This allowed them to make operating profits of £504m – over 90 per cent (£466m) of which was paid to shareholders’ (tuc.org.uk, 5 June 2013). Publicfinance.co.uk can report that the total government subsidy to the railway businesses now stands at £4bn per year (16 April). With just a small slice of the subsidy benefitting ‘a top executive from Network Rail who will become head of construction. . . on an annual salary of £750,000, making him one of the country’s best paid public servants’ (ft.com, 17 January).

‘The private finance initiative (PFI) is a way of creating public–private partnerships (PPPs) by funding public infrastructure projects with private capital’ (wikipedia.org). Benefitting from this is a clique of banks, builders and service providers who build, and sometimes run, schools, hospitals and related public projects. And the benefits to the clique: state payouts over a 20 or 30 year period. However, ‘PFI has been controversial in the UK; though the National Audit Office felt in 2003 that it provided good value for money overall’ (wikipedia.org). Not so thought the disenchanted Treasury Secretary Vince Cable six years later: ‘The whole thing has become terrible, opaque and dishonest and it’s a way of hiding obligations. . . PFI has now largely broken down and we are in the ludicrous situation where the government is having to provide the funds for the private finance initiative’ (bbc.co.uk, 3 March). And the funds continue to flow to those that benefit: ‘As of 2013, it was forecast that 725 PFI contracts for public facilities across the UK, with a total capital value of £54bn, will cost the Exchequer more than £300bn by the time they are paid off’ (newstatesman.com, 20 February).

Mindfulmoney.co.uk’s headline asked the question, ‘What is the cost to the UK taxpayer of supporting our banks’? It answered itself by referring to The National Audit Office’s estimate: ‘it peaked according to the NAO at £1.162 trillion’ (17 July, 2013). Support? Obviously, this isn’t the same as Income Support, which currently is awarded, after means testing, to a couple aged over 18 at £113.70p per week. Some commentators are more impolite and call it a bail-out. One of the main beneficiaries in the UK was the Royal Bank of Scotland which is labelled by the media as ‘our bank’. ‘We’ own 82 per cent of it after the state invested £37 billion of its funds in October 2008. But, dear oh dear, ‘our’ investment has lost a few quid even after more funds were invested. That scourge of the benefits scroungers The Daily Mail could run the headline, ‘RBS has lost all the £46bn pumped in by the taxpayer’. The editor got out his calculator to let his fretful readers know that, ‘In total, the lender has since paid out £4.6 billion in bonuses – £1 billion for every £10 billion it has lost’. Also included in the £46 billion was, ‘a £3.8bn bill for customer mis-selling’ (27 February). Note the word bill. That couldn’t be a fine like those slapped on a benefit scrounger and imposed by the state law courts could it?

Swindlers and swindlers

Such as the case against, ‘ a mother of three who was jailed for five months for swindling more than £70,000 in benefits… DWP Minister Lord Freud said: In addition to the sentence imposed by the court, the department always seeks to recover the benefits falsely obtained, to ensure that fraudsters do not benefit financially from their criminal activities’ (Bristol Post, 6 June 2011). Or a man who gained notoriety via the BBC news site for ‘falsely claiming £28,332 in disability benefits. . . Judge Recorder Richard Booth said the offences were disgraceful and so serious that a prison sentence was necessary (3 November). Or, ‘a man who stole to eat after his benefits were stopped. . . admitting stealing three packets of casserole steak. . . after changes to his benefits left him hungry. . . he pleaded guilty to stealing the food, worth £12.60, and was sentenced to six weeks in prison (The Northern Echo, 22 October).

RT.com on the 28 October reported on a speech by the BoE Deputy Governor, Nemet Minouche Shafik who, ‘denounced the actions of UK traders in foreign exchange, currencies and bonds markets, warning financial misconduct in these sectors goes well beyond a few rogue financiers. . . the BoE’s deputy governor said the tired argument that financial misconduct relates to the behaviour of a ‘few bad apples’ is no longer credible. Shafik suggested UK financial regulation lacks efficacy and robustness, and a regulatory overhaul is needed to fix the barrel and to get rid of the bad apples’. This statement acts as a sop to a very long list of so-called financial misconducts amongst an elite that has made the news, albeit unsensationally, since 2008. Misconduct such as the extremely beneficial practice amongst banks of mortgage selling about which Dean Baker, economist and director of the Centre for Economic & Policy Research said, ‘Knowingly packaging and selling fraudulent mortgages is fraud. It is a serious crime that could be punished by years in jail’ – However – ‘No senior bank executive has faced criminal charges following the mortgage crisis’. William D. Cohan, a former senior mergers and acquisitions banker, wrote in the New York Times that ‘not only has the government barely punished those on the hook for Wall Street crimes, the Justice Department has also offered ‘sanitized’ versions of events that led up to the crimes in its accounts given to the public following investigations (rt.com, 22 August). So Nemet, looks like there might be a few barriers in place when it comes to fixing the barrel. Or maybe that’s just on Wall Street?

It’s easy under capitalism, given all of its contradictions, to see the whole thing as some sort of lunatic asylum. But a better comparison is a prison run by the most proficient thieves. The media is utilised like the pickpocket that directs your attention elsewhere whilst another robs you. One of the things that is stolen is your capacity to think like a human being. Fear, hate and greed permeate the prison walls. But the prison isn’t escape-proof. All it takes to get out is to decide that is what you want to do, and join with others working to bring down the prison walls.

What happened to the rate of profit in the decades leading up to the crash of 2008 and the slump that followed? Some say it went up. Others say it didn’t.

Those who say that it went up say it did so as a result of the ‘neo-liberal’ policies implemented from the 1980s onwards as typified by Reagan and Thatcher but continued by their successors. They argue that this reduced consumer demand and would have led to a slump earlier had demand not been sustained by workers borrowing to spend. Eventually the burden of debt proved too much and the bubble burst in 2008. This, essentially, is an underconsumptionist theory of the crisis.

Kliman denies that there was a rise in the rate of profit or that there was a fall in workers’ standard of living in this period. His explanation of what happened is that when the post-war boom came to an end in the 1970s governments were afraid to let the economic laws of capitalism take their course and devalue existing capital as a way of restoring the rate of profit and capital accumulation. Instead, they resorted to borrowing. The result was that the rate of profit did not recover enough. Eventually, as in the other explanation, the debt-fuelled bubble burst. This is a falling (or not rising) rate of profit explanation of the crisis.

How come that theorists using the same data (US government statistics) can reach different conclusions as to how the rate of profit moved?

Most of Kliman’s book is taken up with defending his method of calculating the rate of profit. The rate of profit is profit as a percentage of capital invested. The two sides more or less agree on how to calculate profit. The disagreement is over how to calculate capital. Kliman argues for using the original value (‘historic cost’) rather than the current replacement cost used by the others. As the latter is generally less than the former it gives a higher rate of profit.

The same argument has gone on between capitalist accountants and it’s a highly technical argument that won’t be easy to follow for those not interested in this sort of thing.

The book’s last two chapters, on the other hand – on the implications of the rising rate of profit theory – are clear. Kliman writes as someone who favours a ‘communal economy’ oriented to the satisfaction of people’s needs which, he says, means that ‘finance, money, exchange, and value would have to be eliminated’, i.e. as a socialist. He points out that the rival theory leads to the view that capitalism can be reformed to work in the interests of the workers.

As its proponents blame ‘neo-liberalism’ rather than capitalism as such the implication is that if this policy was abandoned and state intervention resorted to on a wide scale again then things would get better for workers. And if working class underconsumption caused the problem this can be rectified by increasing wages and benefits. This in fact is what they do advocate on the ground in their reformist campaigns (one of those Kliman criticises is the French Trotskyist Michel Husson).

But let Kliman put it in his own words:

‘ … the notion of state-controlled capital is an oxymoron, like jumbo shrimp. As long as there is capital, what are actually in control are the economic laws of capitalism. Individual capitalists, including individual state capitals and worker-run enterprises, must submit to these laws.’ ‘When all is said and done, accumulation and economic growth under capitalism depend upon the extraction of ever-greater amounts of unpaid labor, not reforms that limit that extraction.’

In fact, such reforms could make things worse:

‘… under capitalism, a new economic boom requires the restoration of profitability, but downward redistribution of income will reduce profitability … [B]y causing investment to fall, downward redistribution could lead to a deep recession, even a depression.’

The Voice From the Back column from the December 2014 issue of the Socialist Standard

The Charity Fallacy

There are many examples of the madness of capitalism but surely this short, stark statement by Oxfam pinpoints the brutal inequality of this insanity: ‘The world’s 85 richest people own the same wealth as the 3.5 billion poorest. The wealth of the super-rich grows greater whilst world poverty bites deeper’ (Times, 8 November). Oxfam herein concisely expose the madness of the production for profit system but their proposed solution is completely useless. They believe that charity is a solution and claim that if they get enough donations they can solve the problem. It is not charity that is the answer but the complete revolutionary transformation to a society based on common ownership and production solely for use.

Poppies And Poppycock

Under the headline ‘Joy and song bloom with poppies at the Tower’, the following piece of news appears: ‘As the last of the poppies was planted in the Tower’s moat … most of the attention has concentrated on the extraordinary crowds that have queued patiently every day to see the display of 888,246 ceramic poppies, one for every British and colonial life lost in the First World War’ (Times, 8 November). One spectator is reported as saying it was fantastic and when the crowd burst into song the crowd absolutely loved it. It is understandable that newspapers are ‘celebrating’ the event, after all it is their job to promote mindless patriotism, but why are workers doing the same? They must lead particularly strange lives if the deaths of 888,246 workers in their masters’ quarrels lead them to this outlandish behaviour.

Mamma It’s Cold Inside

The headline announced the chilling fact that an elderly person dies every seven minutes due to fuel poverty. The article goes on to explain that millions of pensioners are worried that they will not be able to keep warm this winter. ‘Every winter 25,000 old people in England and Wales do not survive the bitter weather – 206 deaths a day. Those living in the coldest houses figure most in the excess winter death rates and illness statistics according to Age UK’ (Daily Express, 11 November). Needless to say this problem does not affect the owning class.

Hollywood Fantasy

Everybody is aware of all the old repeated military movies that the TV churns out. John Wayne or some such hero performs wonderful acts of bravery against the enemy. It is a complete fantasy of course. This is nearer the truth. ‘Jeremy Sears, a Marine who had served multiple tours in Iraq and Afghanistan, walked onto a shooting range outside San Diego on Oct. 6, placed a handgun to his head and calmly pulled the trigger. It was a local news story but didn’t attract attention outside San Diego for the most tragic of reasons. Military suicides have become so common – since 2001, more active-duty U.S. troops have killed themselves than have been killed in Afghanistan’ (Washington Post, 11 November). War, far from being an ennobling experience is degrading to human beings and leads to these tragedies.

Homeless For Christmas

The number of tenants homeless in England and Wales evicted from their houses has hit record levels, with cuts to social security among the factors leading to more than 100 evictions a day. ‘Number of tenants evicted hits record bid as benefit cuts slide. Figures show that more than 30,000 tenants thrown out by the end of September which social landlords say is due to bedroom tax’ (Guardian, 13 November). Figures from the Ministry of Justice show that 11,000 were repossessed by bailiffs between July and September, the highest quarterly figure since records began in 2000. Shelter forecast that 90,000 kids will be homeless this Christmas.

Another Winter Of Discontent

With the advent of winter the government has had to allocate an extra £700m extra for A & E, but the rest of the NHS system is under pressure as these recent figures show: ‘90,000 more patients waiting for an operation than a year ago. 62 percent day target for cancer treatment missed for last 6 months. 24 per cent of patients say it’s ‘not easy’ to get through to GP by phone’ (Guardian, 14 November). Ever helpful, the Health Secretary Jeremy Hunt warned that there will be pressure to deal with an ageing population and suggested that a visit to the pharmacy rather than a hospital may be advisable!

The 50 Years Ago column from the December 2014 issue of the Socialist Standard

The following is an extract from The Observer (Oct. 9) to which the Party wrote in protest at the reference to the SPGB

‘Everywhere around Glasgow, the con­trast in political styles is striking. On the Left, they speak with tongues of the old Clydeside fire, preaching a new society, teaching their audiences a total view of socialist justice and democracy. All have something of the Trotskyite poster in Woodside which snarls at the citizen “Don’t vote for the S.P.G.B. (Socialist Party of Great Britain) candidate unless you understand and want Socialism.”

We publish, without comment, the Observer’s reply:

The Observer, 29th October, 1964.Dear Sir,

I have now heard from Neal Ascherson, to whom I referred your letter of October 11. After helping us in covering the election campaign he returned to his post as our resident Correspondent in Germany; hence there was some delay in reaching him. He writes:

‘I think I should apologise without reserve to the members of the S.P.G.B. for calling them Trotskyite, I was mixing them up in my hurried head with the Socialist Labour League, and there is no excuse for that. I still think that “snarl” expressed the shock of hostility experienced by a reader of the S.P.G.B.’s fiercely honest and uncompromising poster.’

I’m very sorry we can’t clarify this point now in our correspondence columns —it would be rather out of date and there is room for so few of all the letters— but we will take care not to make any such mistake again.

Capitalism is a volatile social system and the Economist magazine, ever aware of its potentially explosive nature, has recently examined the possibility of the extreme economic rivalry in the Pacific region leading to what may turn out to be a more violent phase. The main contestants at present are the USA, China and Japan but there are other fringe countries that may well play an important role in the future.

Since the 1970s trade across the Pacific has far exceeded that of the Atlantic. ‘China, for instance, has taken its hunger for high-protein foods and raw materials to Latin America and has become the biggest trading partner of distant Chile. By one estimate, in 2010 it provided more loans to Latin America than the World Bank, the Inter-American Development Bank and the United States-Import Bank combined’ (Economist, 15 November). The developing rim of the Pacific has become a giant growth factory. Take a look at some of the trading figures. Over the last decade the USA economic growth was about 1.6 percent per year, the European Union was 1.7 percent, whereas Latin American expanded by 4.6 percent, East Asia by 5.4 percent and South East Asia by 5.9 percent.

We have now reached the stage wherein the 21 economies of the largest trans-Pacific group of Asian-Pacific Economic Co-operation (APEC) account for nearly half of global trade. It is a situation in which the major players China and the USA must be very cautious because there is a lot at stake here. This has not stopped China from doing a bit of sabre-rattling from time to time though. ‘We’ve seen indications that Xi Jinping has an ambition to increase China’s influence in east Asia, central Asia, and the western Pacific, said Shi Yinhong, an international relations expert at Renmin University in Beijing. Many statements and actions imply that this will come at the cost of American predominance in the same regions. I think that this is already raising concerns in Washington’ (Guardian, 9 November). A more likely policy to be pursued by China and the USA is probably the one outlined by Hilary Clinton when she was the Secretary of State in 2011 in an article in Foreign Policy: ‘We all know that feelings and misconceptions linger on both sides of the Pacific. Some in our country see China’s progress as a threat to the US, some in China worry that America seeks to constrain China’s growth. We reject both views.’ Even the belligerent Xi Jinping had a more re-assuring aside to Obama last year when he said ‘The vast Pacific Ocean has enough space for the two large countries of China and the United States.’

Despite the diplomatic language when a capitalist country’s trading profits are threatened there is no limit to which political threats and counter-threats can be carried out and the frightening use of military violence is always a distinct possibility in this crazy competitive society.

Each month the "Socialist Standard" must come out. Which at present means that each month the party must take a loss of about £20. This cannot go on, as the Party's General Fund is now almost exhausted. There are two things we can do about it. We can do our utmost to sell as many "Standards" as possible. And we can send money to the party funds. The Central Literature Sales Committee are helping to bring about the first. And the party treasurer waiting to take care of the second. Please get in touch with the Literature Sales Committee with your offers of help in selling the "Standard" and let the treasurer have your donation as soon as possible. THIS is urgent.

The 50 Years Ago column from the March 1960 issue of the Socialist Standard

We know today that the French Revolution was a bourgeois revolution, that from the assembling of the States General to the days of the Directory there was a succession of bourgeois assemblies, and that above all fear drove the Royalist party to cede first one point and then another, and further, that the bourgeoisie, once in unstable control of the State, was compelled, in order to keep the allegiance of its own lower ranks and the help of the incipient proletariat, to grant measures of relief, of political and legal reform, and, of course, a plentiful crop of promises. . . The French Revolution was, then, a bourgeois revolution, made by a wealthy class, a class which, having gradually attained a position of economic advantage, determined on the grasping of political power as the proper safeguard of its interests. There can be little doubt that the English Revolution of 1640 and the great French Revolution were enacted by such.

The economists and financial experts are nearly all Keynesians now, and have been for many years. It is part of the Keynesian technique that when production is running at the full capacity of machines, resources and men, and unemployment is at a minimum, workers must be persuaded not to press for wage increases, and the expansion of production must be damped down. The increase of the bank rate to 5 per cent. was one step in the process, mainly designed to discourage some of the plans to expand manufacturing capacity, by making borrowing more costly. The other step was the warning given by the Chancellor of the Exchequer against wage claims and increases of profits.

The followers of Keynes are quite convinced that their schemes for managing capitalism smoothly are theoretically sound and practicable. But one of their difficulties is that they can rarely agree on what to do in any particular situation and when to do it. So on this occasion Sir Oscar Hobson reproves The Times and others for criticising the Chancellor's action. He wrote:

The Bank fate rise, has met with some criticism. The Times labels it “much caution," suggests that an increase of half per cent. would have been enough and that the “authorities” having in previous years moved “too little and too late” are now falling into the contrary mistake of acting precipitately. My own assessment would be the opposite to this, namely, that if they are erring at all it is in the same direction as before. Instead of delivering an advance warning at the Mansion House in the autumn and then waiting until the third week in January before raising the Bank rate fas they did in 1954-5 and now again in 1959-60) they would have done better to raise the rate without warning (Stock Exchange Gazette. 29/1/60.)

Other critics of the Chancellor are saying that he has misread the situation and ought not to have raised the Bank rate at all.

Railway Wages

Sir Oscar Hobson says that while the Bank rate may be “no instrument for dealing with ‘cost-push-inflation’ springing from excessive wage demands," the 7 per cent. Bank rate of September, 1957 “was effective in greatly moderating the 1958 round of wage demands." The Economist (30/1/60) in an article “Here we are Again?" wants the Government to resist further wage claims, starting with the Railwaymen. It accuses Mr. Bevan of having helped to promote a crisis in 1951, when as Minister of Labour, he “surrendered” to the Railwaymen, and the Conservative Government of having done the same in 1955, and demands firmness now about railway wages. It quotes as a good example “the way in which Londoners withstood the bus strike" in 1957 and thus discouraged other claims for wage increases. It returned to the subject a week later, saying: “If Sir Brian Robertson had given an immediate wage increase to the N.U.R. on Friday last week, it is highly probable that the country would have been sent gently careering again up the well-trodden spiral of inflation." So the Railwaymen, many thousands getting less than £8 a week, are to be held responsible for the past and future rises in prices.

The Labour Party, being in opposition, condemns this attitude, but they are Keynesians too. It was their Government in 1945-1951 that made “wage restraint” a first-line policy and they have declared that if returned to office they would again seek trade union agreement on this issue.

They might reflect on the admission of a writer in the Economist (24/10/59) that “right at the base of Keynesian theory is the psychological datum that workers will acquiesce in a very considerable decline in real wages, by way of a higher price level, without reacting as they do to any prospect of a cut in money wages."

The excuse of the Government always is the baseless one that wage claims are the cause of inflation. Quite apart from this, however, the twenty year rise of prices would still show the failure of the Keynesian doctrines that were embodied in the 1944 declaration of the three parties in the National Government, in which they affirmed their intention to maintain a stable price level.

Knocking at Keynes

In 1957 when Mr. Thorneycroft resigned from the Government, Mr. Enoch Powell, Financial Secretary to the Treasury, resigned with him. The general belief was that they wanted a tougher financial policy from the Government and resistance to wage increases. Mr. Powell, writing in the Financial Times (7/1/60), now attacks the claims of the present Chancellor of the Exchequer that Government policy in the 1959 budget brought about the expansion of trade and production.

He shows that the Government’s particular monetary policies had no effect whatever. He points but that the expansion was already going on and that a similar expansion was going on in the world generally, irrespective of the fact that other governments were following quite different policies. He was saying, in effect, that it was the normal trade cycle operating as it has throughout the history of capitalism.

He concludes:—

Once again we have been denied the privilege of observing at first hand a British Government coping with a recession on orthodox Keynesian lines. We still do not know experimentally what would be the result if, in the face of a persistent fall in propensity to spend, a British Government equally persistently increased its expenditure, and financed it by the creation of money through the floating debt. At any rate that was not the history of the 1958-60 recovery. The upturn got there before the Government: the patient was up and playing golf before he could swallow the medicine; and we must await some other opportunity to ascertain by experience whether the prescription is beneficial, poisonous—or simply neutral.

The only thing Mr. Powell overlooks is that, if the recovery took place without the aid of the Government’s medicine, it also took place without the alternative medicine that he presumably considered necessary.

Rise in Profits

In the meantime investors arc doing very well. The Financial Times (4/2/60) discloses that 109 industrial companies which published their reports in January showed an average increase of 6-7 per cent. in profits as compared with a year earlier, that earnings available for ordinary shares were up by 13.6 per cent. and the dividends actually distributed to ordinary shareholders were higher by 30 per cent.

Too Much Hardship?

Two quotations from The Observer (7/2/60). the first being its proposal for limiting the expansion of production:

. . . there is a case for trying to moderate the housing boom: it is now going ahead very fast, and some building could be postponed without causing too much hardship. (Page 2.)
Last year five million people were wailing for new council housing, two million of them classed as "urgent needers": in 1956 the L.C.C. had only 300 three-room flats to offer to nearly 72.000 families who required them. (Page 16.)

It is not too soon to remind Comrades that the Conference will be held at Conway Hall, Red Lion Square, London, on April 15th, 16th and 17th. A Social and Dance will he held on Saturday, April 16th: fuller details in next month's Standard.

“Gilmac” And “H”

"Gilmac" and “H’’— these noms de plume are so well-known to readers of the Socialist Standard — but one wonders how many readers appreciate that the owners of these names have been the mainstay of the production of the official organ of the Socialist Party of Great Britain for more years than we think even they can remember? It is more than thirty-five years ago that Comrades Gilmac and Hardy first became members of the Editorial Committee, and despite pressure of personal work and domestic worries, have toiled unceasingly to ensure that the only Socialist periodical in Great Britain was published regularly. Members of the Socialist Party of Great Britain rarely express thanks (although they are nonetheless appreciative) to Comrades who have worked so well and so unstintingly for Socialism. This comment is made now, as Comrades Gilmac and Hardy have decided not to stand for the Committee this year—obviously there is a time when even Socialists must have a respite. Although not formally on the Committee, they will certainly continue to write for the Standard, and members of the present Committee (who have learned much from Gilmac and Hardy over the years) know that they can have the counsel of Comrades Gilmac and Hardy at any time.

Coventry Activity

Comrades Boylan and Walsh are very active in Coventry and in their own words “have started our own little Socialist propaganda group on January 16th, when we attended W.E.A. one-day school on “Strikes,” the lecturer being Ihe regional secretary of the T. & G.W.U.” They suggest that after they had taken part in the discussion the lecturer must have felt Maddened, Baffled and Enraged. (He is, incidentally, an M.B.E.) Comrades Boylan and Walsh intend to visit these lectures regularly in an endeavour to get the Party’s name and case well known in Coventry and before long, to form a Group there.

Glasgow May Day

After an unavoidable gap of several years the two Glasgow Branches (City and Kelvingrove) have, at great cost, booked the Cosmo Cinema for their May Day Rally, I960. They hope to have the assistance of a speaker from London, and the Branches together are going all out to make the occasion successful. A fund has been set up to defray the cost and an appeal is made to members and sympathisers in Scotland especially and elsewhere in general, to spare what they can. Please send donations to either of the Branch Secretaries addresses under Branch Directory.

Letter to the Editors from the March 1960 issue of the Socialist Standard

Dear Comrades,

Reflecting in this letter on a chance acquaintance with Ghana which is now “independent” as members of the British Labour Party would describe it.

The Scandinavian Express speeded towards France. Seated next to me in the compartment was a Swedish psychoanalyst who had decided to exchange “Socialism” for an Italian monastery. A tourist pamphlet was sticking out of his pocket and began: “When the plane lands you are standing on the threshold of a great adventure—Great Britain.”

The boat shrugged lazily out of Marseilles harbour into the Mediterranean towards West Africa. For every one African on the boat there were two nuns all crossing themselves at the same time. My berth companion was a young French missionary (sent out to soften up the natives) who was later to read me pieces from the Old Testament and tell me that because I was an African my soul needed saving.

My seat at the dining table was next to an American woman tourist of 65 years, dressed and behaving like a girl of sixteen. Facing her sat a coloured Ghanaian woman married to a wealthy Swiss business man. She told us that because everyone in Switzerland were “equal,” she had left her child there to be educated in one of the “best” schools. It was much nicer to have it grow up with ex-Kings and retired millionaires rather than just Africans.

A young Ghanaian girl journalist sat on my left who had been imprisoned with her “idol,” Dr. Kwame Nkrumah, when capitalism was being run by the Labour Party. It was, however, interesting to see that she was beginning to understand that Africans were just as capable to administer capitalism as the white man. The poisonous black capitalist boiling pot of intrigue had disappointed one more. Yet she still insisted that the white Africans were interlopers and should be removed, which seemed like race prejudice in reverse.

The journalist had invited me to stay with her friend on reaching Takoradi. The next morning the boat arrived at Takoradi harbour. The police stood around looking like mixtures of male nurses and museum attendants.

After a confiscated passport and the refusal to accept the invitation of accommodation, together with a fantastic questioning, I was quickly deported to Nigeria, which was my destination. This ended my brief visit to the “model democracy.”

Speaking on “democracy” in Ghana, Mr. Gaitskell, that great “socialist,” said: “It is not possible for us in Britain to determine how you will develop your democracy. It is your affair, but I think in every new country emerging into nationhood certain principles must be observed. They are national unity, a high degree of personal leadership, and thirdly, and the most important, the preservation of individual liberty at all costs.”

How easy these words slip off the tongue of a leader committed to try and reform capitalism. The detentions, deportations and imprisonments by Mr. Nkrumah’s government are politely called developing “democracy,” supported by the Communists and the shifty Liberal, not to mention the Conservatives, who might have made the same speech themselves. One wonders just how much “individual liberty” the British worker enjoys under his “democracy.” What a garnish to hide the stench of British capitalism!

But there is still hope whilst Pacifist Fenner Brockway looks to God and black nationalism to “liberate” the African workers:

“God speed to the new leaders of Africa in the vast arena of constructive tasks which spreads before them! “

Yes, constructive tasks of maintaining the capitalist system in Africa.

Saturday, March 30, 2019

The Pathfinders Column from the March 2019 issue of the Socialist Standard

It’s a well-known fact that a new TV or fridge doesn’t spring fully-formed from a hole in the ground but is usually produced in stages, from ore extraction to delivery, with different parts constructed by different people, often on different sites at different times. Thus the UK jobs impact of the recent Airbus decision to stop producing the underselling A380 superjumbo, whose wings (but not the rest of it) are made in Britain.

When describing how capitalism works, Marxists talk about the value of products as containing embodied or ‘dead’ labour which has to be accounted for in the final price. For instance, so much for resource extraction, refinement, power, distribution, parts manufacture and shipping, and so forth. Socialists don’t pretend that you can separate and cost out all these elements of dead labour from the finished product. That would be like trying to unbake a cake back into its starting ingredients. The argument only stipulates that the final price has to reflect all this labour otherwise the continued production and sale of this good, at this price, will not be viable.

Where this gets interesting is new developments in EU copyright law, which is in the process of being revised because of the internet revolution, and specifically the impact of hosting sites like YouTube and the various social media giants.

One element of the proposed EU Copyright Directive, Article 13, has Google positively gargling in horror: ‘Article 13 of the EU Copyright Directive states services such as YouTube could be held responsible if their users upload copyright-protected movies and music’ (BBC Online, 14 February). Think how many times (come on, admit it) you’ve wasted hours watching old excerpts of Monty Python, The Good Life, Citizen Smith, Yes Minister and Fawlty Towers on YouTube. All of that stuff, and a billion other things, are of course copyrighted, but so far nobody has raised too much of a stink about it. Article 13 could scupper all that.

But here’s the twister. What if someone films themselves playing a computer game and then uploads the film to YouTube or Twitch as an original publication for others to watch? Yes, people really do that, and they have millions of followers. They own the copyright on their film, but what about the copyright belonging to the game owners? That is embedded or ‘dead’ labour which the EU Directive is expecting to ‘unbake’ and price up, which as we’ve seen above, is going to give EU policy-makers a severe headache.

Technology has so far superseded European law that currently there exists only a state of unofficial consensus whereby copyright is not enforced in cases of what’s considered ‘fair use’ (eg for criticism, reviews, satire etc). But this consensus has no legal status in Europe, unlike in the USA, and so far there have been no court cases to establish a precedent. Hosting companies could be in the situation of having to buy licences for any copyrighted content their users upload, perhaps as well as any other copyrighted material contained within it. No wonder they’re horrified.

The point of all this? Not only is property society a terrible arrangement from the perspective of the 99 percent who don’t own any, it’s sometimes damnably difficult to apply its rules to figure out exactly who owns what and who should be paying whom. That at least is one arcane and intractable problem that socialism could laughingly throw to the winds.

Cause and effect

A recent meta-study has shown a significant link between depression and teenage cannabis use, with ‘robust’ evidence showing that ‘using the drug in adolescence increased the risk of developing depression in adulthood by 37%’ (BBC Online, 13 February). The wording here is, unusually for the BBC, careless and misleading, because it states baldly that the one directly causes the other, which is not shown by the evidence at all, as the article goes on to admit. Tabloid journalists in particular ought to be dragged outside and beaten with the mantra ‘correlation is not causation’. Instead the line should have read ‘using the drug in adolescence is associated with an increased risk of developing depression…’

Anyone alive today in capitalism has multiple reasons to get depressed without even reaching for the Rizlas, and that probably goes double for young people, who generally have a worse time of it economically, socially, psychologically and sexually than older people with settled lives and paid-for houses. Maybe that’s why they say life begins at 40 – because it’s mostly sheer hell until that point, if not after as well.

It certainly could be that cannabis has a deleterious effect on young developing brains. It could also be that depression-prone teens are more likely to resort to cannabis in the first place. Perhaps heavy cannabis use among teens is associated with a raft of other, depression-inducing social behaviours and circumstances. Anyone with long experience of poverty and unemployment knows that skinning up a spliff with mates is a lot cheaper than almost any other social option. Far from causing depression in this situation, cannabis may be the only silver lining in an otherwise black cloud. Ganja-bashing continues to make good headlines, but that doesn’t mean journalists should let their critical faculties go up in smoke.

A recent article in the webzine Dissident Voice also plays fast and loose with causation, when it claims that our serotonin system fuels aggression and so means that a socialist or anarchist non-hierarchical society is impossible. Despite pronouncing in impressively sciencey terms about the metabolic biochemistry of the monoamine neurotransmitter, the author Denis Rancourt (who by the way is not a neurobiologist but a retired physicist) offers not a shred of evidence for his argument that the hormone ‘locks’ humans into either dominant or subservient roles, and indeed his example of dominant social climbers who ‘kiss ass’ to get up the corporate ladder seems to flatly contradict his own case. Too much is wrong with his discussion of serotonin to go into here, but in a nutshell it comes down to correlation and causation again. He cites several academic studies in support of his case, but if you read what they say they don’t support his claim either. In fact one luminary, Robert Sapolsky, is scathing of such thinking in a fascinating YouTube lecture, where he says within the first few minutes that because genetically humans are almost identical with all other animals even including fruit flies, ‘Genetics and neurotransmitters etc tell us nothing about what makes humans humans’. He then drives home the point that we are not genetically fixed by citing his own study of a troop of baboons who, after all the aggressive males accidentally died of TB, exhibited an astonishing change in behaviour, becoming socially friendlier and more affectionate, with males even grooming each other – unheard of for wild baboons. One wonders if Sapolsky and the other cited authorities realise they are being cited in support of an argument they would heartily oppose.

‘World In Crisis: a global analysis of Marx’s law of profitability’. Edited by Guglielmo Carchedi and Michael Roberts (Haymarket books. 2018)

The stated purpose of this collection of essays is to advance the theory that the tendency of the rate of profit is to fall within the capitalist mode of production, according to Marx. More specifically, that the fall of the rate of profit is an observable long-term trend, and that the rate of profit is the key factor in economic crises. Roberts notes that there is disagreement within Marxian economics as to whether the declining rate of profit can be empirically observed. This book is premised on the fact that it can be.

For Marx the rate of profit is the excess of value of a commodity over its cost price, which he expresses as the formula s/(c+v) (‘s’ is surplus value, ‘c’ is constant capital, the cost of machinery and components, ‘v’ is variable capital, the wages of workers whose labour adds value to the product).

Competition between capitalists tends towards equalising this rate of profit, as each capitalist seeks to invest in those branches of industry that are generating the highest returns. Technological improvement gives a competitive edge to capitalists, so there is a tendency to increase the ‘c’ part of that formula. In the long run this means that the total capital will rise in proportion to the surplus value being produced, and the rate of profit will tend to fall.

What Roberts, Carchedi and their contributors observe in their data is that this is precisely what is happening. There are problems, though, as many of the data tables/graphs are attributed to ‘author’s calculation’ and there are no links given to data sets or any indication of how these representations were derived.

It is difficult to observe the working of these Marxian formulas in the real world, because, even leaving aside any political incentive to misrepresent the reality of the situation, the categories Marx described may not correspond with any specific data set. For example, some surplus value manifests itself as inflated salaries for directors, and ‘profit sharing’ schemes would manifest as profit, rather than being part of wages, as they really are.

This is not necessarily fatal, so long as the data used is consistent, and then at least it is showing some real world trends from which the Marxian categories can emerge as shadows. An observable, consistent decline in the empirical rate of profit, though, does not necessarily mean that Marx’s tendency is observed in action. Other factors may be in play (which these essays sometimes mention, without exploring).

There is little or no discussion of primary accumulation — what the Marxist geographer David Harvey describes as accumulation by dispossession. That is, wealth that is acquired not by market rules, but by fraud or force (the great historical example being slavery). This gap is puzzling, especially as the central plank of the crisis theory presented is that the fire sale of the capital of bankrupts is necessary to restart profitability and accumulation. The nearest any articles come to addressing this matter is by hand-waving mentions of ‘imperialism’. The point is, though, that the logical effects of falling profitability would be for capitalists to abandon market accumulation and resort to other forces, rather than continue to let profits fall through the floor.

One other force is rent seeking. Incredibly, rent is not even mentioned in the index of this book. Carchedi does partially address rent, discussing monopolies as a potential response of capitalists to falling profitability. He correctly notes that the underlying effect of technical compositions of capital (the ratios of capital to labour) means that real surplus profit rates will vary among monopolies. What he misses, however, is that such differential surplus profits will be often invisible, and that the monopolists would lack the means to observe different rates of profit, or to pursue improved ones. This was essentially one of the significant problems historically encountered by Eastern Bloc state capitalism.

The power of the idea of the tendency of the rate of profit to fall lies not in the observed phenomena of declining profitability, but, like the dog that didn’t bark in the night, in the steps the ruling class may take to avoid its effects. Rather than simply pointing to periodic crises of capitalism, we are in some ways better pointing to the inevitable need to periodically disrupt society and dismantle existing social relations in order to engage in a new spurt of profitability for one faction or another of capitalists.

Notwithstanding this, there are useful chapters on derivatives and algorithmic trading which do some useful work in dismantling the idea that crises are caused by bankers and spivs in the city. It also provides a useful overview of the state of worldwide capitalism.

Letter to the Editors from the March 2019 issue of the Socialist Standard

1. First, I never argue (book review of Cleaver’s Rupturing the Dialectic – the Struggle Against Work, Money and Financialization in January Socialist Standard) that capitalists are not interested in profits, on the contrary precisely because I argue their system is based on putting people to work, profits are essential to maintaining and expanding the imposition of work. Second, writing ‘It’s a point of view but not that of Marx’ is simple assertion but makes no argument to convince the reader. It also smacks of sectarianism: all Marxists whose interpretations differ from mine are not Marxists at all.

2. First, the superficiality of the reading is apparent in ascribing to me the ‘classic error’ of underconsumptionism (i.e., ‘workers not being able to buy back all they produce as the cause of crises’) given that the inadequacy of consumption demand is clearly treated as only one of many causes of ruptures in the circuits of capital, not ‘the’ cause of crises. Second, saying that I make the mistake of seeing taxes as simply a burden on workers, while ignoring the discussion in the book of how some of what taxes pay for is not only of use to workers but are programs and services we have fought for, is another misrepresentation.

3. First, it’s odd that you seem to accept the idea that getting rid of money and markets are essential elements in getting rid of capitalism, but dismiss efforts to marginalize money. In the absence of an actual argument against ‘marginalizing money’ I’m left with the impression that the dismissal is based on the oh-so-revolutionary rejection of ‘reformism’. Second, leaving aside evaluation of your list of reforms as accurate representation of the struggles I discuss in the book, I must say that simply dismissing struggles for reforms of use to workers with no rationale hardly constitutes an argument. At least Weston – mentioned on page 235 of the book, in the section on ‘Reform or Revolution’, made a case for dismissing struggles for higher wages – a case that Marx refuted with counterarguments as to why such struggles were important. Arguments with which I agree in the book – one of those many moments that you would have to counter to make a convincing argument that what I have written is ‘not Marx’. Third, there’s no ‘paradox’ in supporting both lower costs of living and higher wages, they are complementary and both buy time (and energy) for struggle.

4. First, the assertion that success in lowering consumer prices or making some goods and services free automatically implies that wages will fall just doesn’t hold water. This assertion ignores how both the value of labor power and the level of wages/income are determined by struggle. I do not ‘assume’ workers ‘could successfully resist’ efforts to lower wages, only that they generally try to resist. There are plenty of historical examples in the book of workers failing to resist as well as of successful resistance. Second, the last line about one idea of autonomist Marxists contains, once again, only pure assertions with no demonstration or argument that might lead the reader to take them seriously, ie, the assertion about what they think/imagine and the assertion about the idea being a ‘mistake’.

Had I been editor of your newsletter, I would have sent the published text back when still a draft along with comments like the above – and suggestions about how to do the job in a more convincing manner.

Harry Cleaver

Reply:

1. We never said you argued that the capitalists weren’t interested in profits, only that you said that they were more interested in controlling workers and that making profits was a means towards this end. The particular passages we had in mind were these: ‘… socially and politically speaking, profit making is merely the capitalist means to its social aim of controlling us by forcing us to work’ (p. 83) and ‘Marx focussed on the dialectical character of the struggle within capitalism between those who impose work and those who resist’ (p. 72). There is no evidence that this was Marx’s view on what the struggle was and who it was between, and there is nothing ‘sectarian’ about pointing this out. It’s a question of fact, not opinion.

2. On p.55 you do indeed use the workers-can’t-buy-back argument, which can’t be an explanation of crises since it is the case that the workers cannot buy back out of their wages what they produce all the time, even during a boom. And how can it be ‘misrepresentation’ when we didn’t represent anything about the conclusion you draw from the notion you accept that taxes are a burden on workers as well as on capitalists? We willingly grant though that you draw the logical conclusion from this mistaken premise that workers should get involved in disputes within the capitalist class over which section of them should bear more or less the burden of taxation.

3. You seem to have missed our point completely. While free services and free access to use-values even under capitalism show that people adapt to this by only taking what they need (rather than grabbing and hoarding), under capitalism these measures have the economic effect of reducing the cost of reproducing labour-power and so exercise a downward pressure on money wages. Our view is that the best way to combat this is the trade-union struggle. We don’t accept the view of ‘Citizen Weston’, which Marx refuted in his talk to British trade unionists in 1865 later published as Value, Price and Profit, that struggles to increase wages are pointless as they merely lead to a rise in prices leaving workers no better off. That is a fallacy. For us, the struggle to get the highest price possible (what the labour market will bear) while not revolutionary is not ‘reformist’. We say workers should wage this struggle and our members take part in it, even if it is purely defensive and never-ending.

4. We always thought that so-called ‘autonomist Marxists’ criticised what they imagined was the ‘economic determinist’ position of those who argue that there are narrow limits to what workers can achieve under capitalism by their struggles. Are we wrong about their/your ‘voluntarist’ position on this question, not dissimilar to that of common or garden reformists, that this is not the case and that your disagreement with them is instead only over method (direct action rather than parliamentary action)?